Professional footballers must have a great life. Playing football and earning significant amounts of money. Oh, and using some very clever tax advisers…
There are serious amounts of money being paid to some of the top footballers. Payments of in excess of £200,000 per week are fairly common (over £10 million per year).
This income doesn’t simply go into the tax return as salary. No, there are far more sneaky/clever [delete as you feel appropriate] ways of minimising the tax liability (or should I say maximising the after-tax income).
One of the methods used to minimise the tax is to make two types of payments to the player.
One would be for playing football whilst the other would be for “image rights”.
“What are image rights?” I hear you say.
Well, the basic idea is that the player would agree to let the football club use his image in any sponsorship or TV deals that the club has.
Without going into too much technical detail, the key difference from a tax point of view is that the payments made to the player for playing football would be classified as employment income and would be taxed at 45%.
Payments for image rights on the other hand would in effect be rental payments for an intangible asset. Players would assign their image rights to a company (where they could be the 100% shareholder) and the company would only pay corporation tax of 19% on the income.
With the globalisation of the Premier League, there are now numerous players who are not tax domiciled in the UK and if their image rights were channelled through a non-UK company they could potentially escape tax altogether.
Given the size of the payments involved there’s a lot of tax at stake and no doubt the tax authorities will be looking closely at these schemes.
In the meantime, most of the readers of this blog are not professional footballers but instead undertake far more interesting finance and accounting activities in an office. Why not suggest to your boss at your next pay review that you’d like image rights instead of a pay rise so that you can receive more tax advantageous rental income from an intangible asset via your personal company…
https://www.theexpgroup.com/wp-content/uploads/2017/04/football-agents-1.png476846Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2021-03-11 09:19:072021-03-11 13:31:01I’m not kicking a ball, I’m being looked at.
Whilst a lot of you won’t admit to being lazy (and I’m sure most of you aren’t in fact lazy!), some of you will know somebody who you feel is lazy.
Is it such a bad thing to be lazy though?
Perhaps not, as according to a study by scientists from Florida Gulf Coast University laziness could correlate with high intelligence.
The study found that people with a high IQ rarely got bored. As a result, they spent more time lost in thought. On the other hand, the study suggested that less intelligent people were more likely to be prone to boredom and consequently were more likely to do more physical activity.
The researchers worked with 2 types of students. The first group expressed a strong desire to think a lot whilst the second group were keen to avoid doing things which were mentally taxing.
The participants were then fitted with fitness trackers which monitored how much they exercised over a 7 day period. The study found that people who thought a lot were much less active than those individuals who avoided high-level thinking. Interestingly, this discrepancy in levels of activity only happened during the week and there was no difference during the weekend.
Before any of the lazy people out there start claiming that they are more intelligent, it’s worth noting that the sample size of the test was small and further tests will be needed to prove the correlation.
https://www.theexpgroup.com/wp-content/uploads/2016/11/lazy-in-the-office.png9441678Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2021-02-19 07:53:222021-02-22 14:35:37Laziness and intelligence.
Do you have children? Have they ever told you a lie? Even a small teeny weeny lie?
Well, if they have then although you may not be particularly pleased with them, it may actually mean that they have good memories and excellent thinking skills.
Psychologists at the University of Sheffield tested 135 children and found that those children that lied performed much better than the honest children in the group.
The children in the study were aged between 6 and 7 years old and during the study they were given a trivia game. The answers to the trivia game were on the back of the card which they had been given. Initially, each child was in a room accompanied by one of the researchers but the researcher then left the child alone with the card with the answer on the back.
Before leaving the room the researcher told the children not to look at the answer but what the children didn’t know was that when they were alone in the room there were hidden cameras which were monitoring whether they would look at the answers on the back.
25% of the group subsequently cheated and looked at the answers on the back of their cards but claimed that they hadn’t cheated when the researcher returned to the room.
At a later stage, all of the children had to perform a separate memory test and the research found that the children who had lied performed significantly better than those children who didn’t lie.
Dr Tracy Alloway, project lead from the University of North Florida was also involved in the research and said that “this research shows that thought processes, specifically verbal working memory, are important to complex social interactions like lying because the children needed to juggle multiple pieces of information while keeping the researcher’s perspective in mind”.
This has got me thinking as a lot of the readers of this blog are accountants or studying to be accountants.
“Thought processes”, “verbal working memory”, “juggling multiple pieces of information” and “keeping other people’s perspective in mind” are all skills which many accountants need.
Does this mean that you would make a good accountant if you were a good liar when you were a child?
Whatever your answer is, I’m not sure I would believe you…
https://www.theexpgroup.com/wp-content/uploads/2016/02/Young-accountant.jpg7691361Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2021-01-07 09:00:252021-01-07 16:31:38Would a good liar make a good accountant?
Does your weight affect the amount of money you earn?
That’s an interesting question and researchers from the universities of Strathclyde in Glasgow and Potsdam in Germany have come up with a potential answer.
They analysed data from nearly 15,000 working men and found that men within that the recommended Body Mass Index (BMI) health range earnt more than those who were outside of the range.
Individuals who were underweight on the body mass index were found to earn 8% less than those who were in the top end of the healthy bracket. They found that the effect was more prominent in manual jobs where no doubt the extra strength of the guys in the healthy weight bracket helped increase their earnings.
What was perhaps surprising though was that there was also a difference in earnings in white-collar office jobs. They found that in the more middle-class occupations the rewards peaked at a BMI of around 21.
It wasn’t just men who were impacted though. The study also looked at the weight and earnings of 15,000 German women and found that the slimmest earnt the most and the obese the least.
Jonny Gifford, of the Chartered Institute of Personnel and Development was quoted in the press as saying “it is depressing that, in this day and age, looks are in any way a factor in how much people are paid”.
I have to agree with him as organisations should employ people on the basis of their abilities as opposed to how heavy they weigh.
Anyway, best dash as I’ve got a doughnut to finish…
https://www.theexpgroup.com/wp-content/uploads/2019/08/Office-donuts.png9441678Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2020-12-22 07:08:122020-12-22 15:17:33Pass the doughnuts…
Do you wish you had a better memory? Perhaps you do but you can’t remember whether or not you do.
If this is the case then help may be at hand.
University researchers have suggested a simple technique which could improve your memory.
Dr Mark Moss from Northumbria University led a research study which found that students studying in a room with the smell of the herb rosemary (in the form of essential oils) achieved 5% to 7% better memory results than students undertaking similar studying in a room without the smell of rosemary.
Dr Moss reported that the sense of smell in humans is highly sensitive and sends messages to the brain which can set off reactions and responses.
In the case of rosemary, the smell could well result in a better memory.
This view isn’t new though as ancient Greek students used to wear garlands of rosemary in their exams and Ophelia, the young noblewoman in Shakespeare’s play Hamlet said “There’s rosemary, that’s for remembrance.”
So, in conclusion, the next time you are studying hard for an exam it may be an idea to buy some rosemary essential oils to help your memory.
That is of course, if you can remember to buy some in the first place…
(Details of some of the work done by Northumbria University can be found here).
https://www.theexpgroup.com/wp-content/uploads/2017/05/rosemary_memory.jpg32095705Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2020-12-01 22:27:222020-12-08 22:15:48Remind me – what was I going to buy?
I’ve been a qualified accountant for a fair few years now.
I had the pleasure of bumping into my first auditing lecturer recently. It was at a business mixer event and even though it was a long time since we last saw each other he really hadn’t changed that much.
We got talking and I reminded him of something that he told me that I’ve remembered ever since and to me is a great way of explaining what is meant by “True and Fair”. Those of you that have studied financial reporting papers will be aware of the importance of “True and Fair” in connection with financial statements.
In summary, financial statements should provide what is generally understood as a true and fair view of the reporting entity’s financial position, performance and changes in financial position.
I always remember my lecturer telling me the story of the ship’s captain that was having a problem with his first mate who was always drunk. In the end the captain wrote an official entry in the captains log saying “Today, the first mate was drunk.”
The first mate was upset about this and the next time he took charge of the ship when the captain was asleep, he wrote in the log that “Today, the captain was sober”. This of course implied that on other days the captain wasn’t sober as he was drunk.
Now, the statement “today, the captain was sober” was clearly true but I’ll leave it up to you to decide whether or not it was fair!
https://www.theexpgroup.com/wp-content/uploads/2020/06/true-and-fair.png443788Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2020-06-02 12:47:142020-06-04 13:01:36The Captain was sober, the First Mate was drunk. Was that true? Was that fair?
Ethics are pretty important if you’re a partner in an accounting firm. Unfortunately for these guys though they weren’t the most ethical of people as they were involved in cheating in exams.
The cheating was uncovered by the SEC (Securities and Exchange Commission) in the US. They were initially investigating claims that KPMG had altered previously completed audit work after receiving stolen information about what inspections would be conducted by the Public Company Accounting Oversight Board.
During that investigation however they also found that numerous KPMG audit professionals cheated on internal training exams by sharing answers.
Cheating at exams by sharing answers? Surely that would be a junior member?
The key people involved were (now former) KPMG audit partners.
The investigation stated that former partners Timothy Daly, Michael Bellach, and John Donovan were involved in the cheating.
They had obtained images of questions and answers to the tests from subordinates and then shared them with members of their team.
The tests which were taking place were in connection with ensuring that KPMG audit staff understood certain accounting and auditing principles.
KPMG themselves became aware of potential cheating on the exams and began an investigation. They sent a document preservation notice to all KPMG staff (this basically means not to delete or destroy any potential evidence).
The ex-partners however ignored this preservation notice. They deleted various text messages and denied any wrongdoing to KPMG investigators.
KPMG were obviously not happy with the situation when the truth emerged and the partners soon became ex-partners of KPMG.
The three individuals were also suspended from appearing or practicing as an accountant before the SEC (although they can apply for reinstatement in the future).
KPMG had a pretty bad time of it last year in terms of the stolen PCAOB information and the exam cheating and had to pay a penalty of $50 million.
Steven Peikin, co-director of the SEC’s division of enforcement, said: “Audit professionals play a critical role in the integrity of the financial reporting process and the protection of investors. These actions reflect our commitment to hold these gatekeepers responsible for breaches of their professional obligations.”
A KPMG spokesperson said “We are a stronger firm as a result of the actions we are taking to strengthen our culture, governance and compliance program.”
https://www.theexpgroup.com/wp-content/uploads/2020/05/kpmg-partners.png6271119Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2020-05-15 13:27:172020-06-02 13:18:00KPMG partners cheated in exams.
Deloitte has stated that Manchester United are better than Liverpool.
Now before anyone starts getting concerned that Deloitte are moving away from finance and becoming football pundits, I should stress that I’m referring to the Deloitte Football Money League.
Deloitte has been compiling the Football Money League since 1996/97 and the League lists the top 20 clubs in the world for revenue in a football season. They have recently released the figures relating to the 2018/19 season and a few records were broken.
The combined revenue for the 20 richest clubs in the world grew by 11% and reached a new high of €9.3bn (£8.2bn).
It’s a Spanish top two for the second consecutive year. This time though the positions are reversed with Barcelona taking top spot and Real Madrid dropping to second place.
In terms of the fortunes of the eight English Premier League clubs in the table, Manchester United remains in third with revenue of €712m.
United’s closest Premier League rivals, Manchester City and Liverpool, generated revenues of €611m and €605m respectively.
The Deloitte Football Money League measures a club’s earnings from match day revenue, broadcast rights and commercial sources, and ranks them on that basis. The study doesn’t include player transfer fees though.
More details on the report can be found here and the top 10 in the league are:
1 Barcelona €841m
2 Real Madrid €757m
3 Manchester United €712m
4 Bayern Munich €660m
5 Paris Saint-Germain €636m
6 Manchester City €611m
7 Liverpool €605m
8 Tottenham Hotspur €521m
9 Chelsea €513m
10 Juventus €460m
https://www.theexpgroup.com/wp-content/uploads/2017/01/football-report.jpg476847Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2020-03-20 00:24:002020-03-20 12:09:43Manchester Utd and Deloitte
A lot of you may have been on business trips but I bet your trip wasn’t as exciting (and tragic) as this gentlemen’s trip was.
What was also surprising was that his employer was found liable for his death as it was classified as an industrial accident.
The exact cause of death was a cardiac arrest whilst he was having sex with a stranger he had met on the business trip.
Now, whilst having a heart attack during sex with a stranger probably wouldn’t meet most people’s definition of an “industrial accident” a French court found otherwise. The court stated that the employer was responsible for any accident occurring during a business trip and ruled that his family were entitled to compensation.
The man who died on the job, named as Xavier X, was working as an engineer for TSO, a railway services company based near Paris and his employer had perhaps quite reasonably argued that he was not carrying out professional duties when he got into an extra marital relationship with a total stranger in his hotel room.
This opinion though wasn’t accepted by the court and they upheld the view that sexual activity was normal, “like taking a shower or a meal”.
As a result of it being classified as a normal activity on a business trip, the death was considered to be an industrial accident and under French law, partners or children of industrial accident victims receive up to 80 per cent of their salary until what would have been the person’s retirement age, with pension contributions paid from then on.
One of the five fundamental ethical principles is Integrity.
Being straightforward and honest is a vital characteristic of being a professional accountant.
Most people who are studying for their professional exams have one thing on their mind. Namely, to pass their exams but four students who were studying for their ACCA exams had other things on their minds and at the same time, were not the brightest individuals out there.
What they planned to do was to register for some Computer Based Exams (CBEs) and then whilst sitting the exams they would use their mobile phones to take photos of the computer screen showing the questions. They would then sell these photos with the questions on them via the internet.
The four individuals involved, Chen Yiyun, Hiujiao Ru, Zehui Gong and Ziying Wang decided to sell the questions on Taobao Marketplace, a Chinese shopping website.
They no doubt thought that this was an extremely clever way of making some money. What could possibly go wrong by taking photos of the questions and then selling them online?
One of the other fundamental ethical principles is that of Professional Competence.
Now, if these individuals had even a minuscule amount of Professional Competence, they would have reviewed the photos before selling them.
Alas for them they didn’t review them.
If they had reviewed them, they would have seen at the top of the computer screen in the photos their ACCA student registration number and the exam centre.
ACCA were made aware of the questions being for sale and made a test purchase on the Taobao Marketplace. Given the student registration numbers were on the screen, they didn’t need a team of top detectives to identify the individuals involved.
Unsurprisingly, the four individuals are now ex-students of ACCA having been found guilty of misconduct and they were ordered to pay costs ranging from £3,500 to £7,000.
https://www.theexpgroup.com/wp-content/uploads/2019/11/ACCA-exam-cheating.png9441678Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2019-11-28 22:38:372019-11-28 22:38:38Exams for sale….
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